Over the past few days I have been receiving a number of letters & emails informing me that the FSCS protection limits are reducing from £85,000 to £75,000 after the 1 Jan 2016.
Now I have been looking at this with regard to my cash accounts but I have just received a letter from my pension company stating that this applies to them too. So if my pension account has over £75,000 invested then I will only be covered up to this limit – I wish I had that much in my personal pension account it is hardly reading a 4-digit figure at the moment!
It does make me wonder about the security of any of my personal pension pots and specifically the AVC account that I have been contributing into since my early twenties, it hasn’t reached this limit but does have the potential too before I reach retirement age.
It just seems to be another hammer blow on pension saving. If you have over £75,000 in a pension account, well done and a brilliant achievement, but if you want to spread the risk and secure its value because you still have some years until you retire, you will need to transfer some to another company – oh and have the hit of transfer fees ?
If the reason you are transferring is due to the reduction in the FSCS protection limit then this should be permitted free of charge! Oh – and the final comment – “We recommend you speak with a financial adviser” so yet another fee to pay.
My bank has said that if I wish to move money due to FSCS changes, I can do so without penalty even if the money is held in accounts that have withdrawal charge clauses. Why aren’t the pension companies offering a similar option?